Indian Market Has Maintained Certain Level of Sanity, Says FM Sitharaman

Finance minister Nirmala Sitharaman on Friday said despite huge fluctuations globally, the Indian stock market has maintained “a certain level of sanity” and the market should be allowed to play on its own.

The statement from the Finance minister comes days after Sebi chairperson Madhabi Puri Buch had said that there are pockets of froth in the small and midcap stocks and the regulator is looking into the same to come out with a possible consultation paper.

Speaking at India Today Conclave, Sitharaman said, “I allow the markets to play on their own…we should leave it to the wisdom of the market because all of us have seen that despite huge fluctuations globally, the Indian market has maintained a certain level of sanity. It hasn’t really gone too violent this way or that way. So, I place a lot of trust in the market.” Earlier this week, the capital markets regulator had raised concerns about over valuations of small and midcap stocks, indicating possible market manipulation and the risk of a market bubble.

“There are pockets of froth in the small and midcap space in the equity markets that have the potential to become a bubble and burst affecting investors,” Buch had said.

On Crypto assets, Sitharaman said, they cannot be currencies and that’s the government of India’s position.

Currencies are to be issued by the government or the central bank of the day, she said.

Crypto assets are technology-driven and have a bearing on cross-border payment, she said, adding that a comprehensive regulatory framework around such assets has been considered at the G20 level.

“If one country regulates and others don’t, it will be an easy way of moving money, round-tripping or funding drugs or even terrorism and so on. So we wanted to create a framework by taking it to the level of G20. It has been very well received, and I’m sure there will be some framework emerging,” FM added.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)